Pelosi says House Democrats will support GOP payroll tax extension plan

House Democratic leaders will support the GOP's stand-alone extension of the payroll tax holiday, Minority Leader Nancy Pelosi announced Tuesday.

"We have long proposed bringing this tax cut to the floor without pay-fors," the California Democrat said, "and House Democrats will support it so that taxes are not raised on 160 million working Americans."

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Pelosi was quick to warn that the stand-alone payroll tax bill “should not be a substitute for the work of the conference committee,” which is trying to negotiate a bipartisan deal on the larger tax bill.

Pelosi's statement is a departure from the Democrats' initial reluctance to embrace the Republicans' plan to separate the payroll tax cut from the package. That separation, the Democrats warned this week, threatens the other two provisions of the package: an extension of emergency unemployment insurance (UI) benefits and an increase in payments for doctors who treat Medicare patients.

However, with Republicans moving toward a vote on the stand-along tax bill as early as Wednesday, that position would have forced Democrats into a tough vote against the extension of a tax break championed by President Obama.

Minority Whip Steny Hoyer (D-Md.) said Tuesday that the Republicans' strategy puts the unemployment and Medicare provisions "in doubt."

"Our concern is going to be that somehow they would deal with one-third of what we ought to do and leave the other two behind," Hoyer during a press briefing in the Capitol. "We believe all three ought to move forward."

Asked if he would support the stand-alone payroll tax cut if it comes up for a vote, Hoyer demurred.

"I don't want to answer that question until I see what they bring to the floor," he said. "I haven't talked to our members yet. … We'll have to look at it, but all three need to move forward — that's our position."

Hoyer said he's still hoping the members of the bipartisan conference committee can iron out a deal on all three provisions and bring the compromise to the House floor this week, though he conceded Tuesday that he's "not exactly sure how far they've got."

With both chambers scheduled to be out next week for the President's Day holiday, House and Senate leaders are hoping to finalize a deal on the tax package before the end of the week. The current payroll tax, unemployment and Medicare benefits expire March 1.

If the sides are unable to reach an agreement before the recess, Pelosi said, GOP leaders "should cancel the recess and remain in Washington next week."

"These crucial policies affect millions of middle-class families and seniors and must not expire at the end of this month,” she said.

The payroll tax issue has been a political liability for the Republicans since December, when GOP leaders resisted a Senate-passed bill extending the payroll tax holiday through February. Democrats hammered the Republicans for the impasse, arguing that the GOP is more concerned with benefits for the wealthy than the middle class.

Republican leaders, for their part, have blamed the gridlock on Democrats for resisting cuts that could offset the extended payroll tax cut. 

"To date, Democrats have refused virtually every spending cut proposed – insisting instead on job-threatening tax hikes on small business job creators – and with respect to the need for an extension of the payroll tax cut, time is running short," Speaker John Boehner (R-Ohio), Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) said in a joint statement Monday.

Hoyer said Republicans, faced with the public backlash to the impasse, "caved" this week on their offset demand.

"The Republicans don't want to be in the position they were in in December," he said.

The Democrats have been quick to note that Republicans, as their first major act after 2010's wave elections, backed a $858 billion tax package that included an extension of the Bush-era tax cuts for the wealthiest Americans — cuts that were not offset by changes elsewhere in the budget.

This story was posted at 2:06 p.m. and updated at 2:44 p.m.